Valuation estimates are among the most complex and critical elements of financial reporting. Accounting transactions such as business combinations, asset acquisitions, and impairment testing all require fair value measurements, and are often material to financial statement users. They also involve complex issues and judgment. The use of CBVs in this process, both as management’s expert and as auditor’s expert, significantly improves the quality of financial reporting, strengthening the Canadian capital markets and contributing to investor confidence.
A new joint publication by CBV Institute and the Canadian Public Accountability Board (CPAB) clarifies the role of valuation experts as a critical part of this process. The report outlines how CBVs, auditors, and management each play distinct yet interconnected roles in preparing and auditing fair value estimates.
Dr. Christine Sawchuk, President & CEO, CBV Institute, said “we were pleased to collaborate with CPAB staff on the development of this publication which is a must read for those involved in preparing, reviewing and auditing valuations used in financial reporting, including boards and those charged with governance. CBV Institute is committed to working with stakeholders to continuously elevate valuations and valuation practice in the public interest, and we hope that this publication will lead to more consistent, transparent, and reliable financial reporting.”
CPAB’s risk-based inspections have historically flagged valuation as a key area where public companies can make improvements – this comes as no surprise, as valuation requires technical expertise and professional judgment.
In the evolving landscape of financial reporting and increasing complexity of estimates and valuations, CBVs are uniquely equipped to undertake high-quality valuation work. With deep technical knowledge, informed and experienced professional judgment, and adherence to rigorous standards, CBVs help businesses address complex accounting estimates with clarity and confidence.
The new publication:
Importantly, the report underscores the public interest role of valuation professionals and the importance of valuation standards and provides important tips and examples of good practices observed by CPAB.
As Canada’s only designation dedicated exclusively to business valuation, the CBV credential signals credibility, objectivity, and a commitment to professional excellence.
Download the full publication to learn how CBVs support the integrity of financial reporting and Canada’s capital markets.